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6 White Paper on the Business Environment in China
comm and Microsoft said that their firms are abiding by laws in the Third Plenum in 2013 and recognizing that in order to
China and are cooperating with authorities. 17 make these reforms work, it is vital for China to have strong
regulatory institutions, the Fourth Plenum of the CCP’s 18th
In September 2014, at a meeting with foreign executives at Party Congress in October 2014, passed the Decisions on Major
the China International Fair for Investment and Trade (CIFIT) Issues about Promoting the Rule of Law in a Comprehensive
in Xiamen, an annual event organized by China’s Ministry of Way, laying down the framework for a series of regulations
Commerce, Vice Premier Wang Yang declared that China is about the development of a market economy, including power
not targeting foreign multinationals in the enforcement of its list, setting restrictions on rent-seeking, protecting property
anti-monopoly law. Mr. Wang said that of 335 pricing investi- rights, opposing monopolization and stimulating innovation.
gations conducted by the National Development and Reform Chinese media reported that all these regulations aim to draw
Commission (NDRC) as of September 2014, only 33 affected a line between the government and the market, and focus on
foreign companies. Moreover, fines imposed on state-owned building a legalized, regulatory economy. These regulations will,
enterprises were not less than those levied on foreign compa- the report said, “no doubt play an active role in keeping a fair
nies, Mr. Wang said. He added that, if anything, China will be competitive environment, improving economic effectiveness.
tougher on Chinese companies than on their foreign competi- The dividends brought about by these regulations will help
tors. He explained that the intensified enforcement of the an- greatly China’s economic transformation and upgrading.” 9
ti-monopoly law “reflected China’s transition to ongoing super-
vision of companies and markets, rather than simply approving In an October 2014 editorial released after the Fourth
companies’ plans and then failing to monitor their activities.” 14 Plenum (whose main topic of discussion was implementing a
stronger rule of law), People’s Daily, the de facto broadcaster of
Also in September 2014, Chinese regulators echoed Vice political agendas from the perspective of the Communist Party
Premier Wang’s comments and denied allegations made by for- of China, defined the “rule of law” as “governance according to
eign business groups that China is using its anti-monopoly law the Constitution. To respect the Constitution and implement
to unfairly target foreign companies. In a rare joint press brief- it in letter and spirit is to lay the foundation of the socialist rule
ing, according to the Wall Street Journal, Xu Kunlin, an official of law with Chinese characteristics.”4
at the National Development Reform Commission accompa-
nied by senior officials of the Ministry of Commerce and the That same month, various online Chinese netizens and
State Administration for Industry and Commerce, three of the academics took to the interwebs to express their opinion about
main entities that have been spearheading anti-monopoly and the rule of law in China, as aggregated by China Daily:13
pricing investigations of the commercial sector in China, said
that China treats foreign and domestic companies fairly and re- (The following are quoted verbatim from China Daily, October
iterated that China does not specifically foreign companies for 21, 2014)
anomalies probes. 17
“To prevent the authorities from abusing the law, it is
The same report speculates that Chinese regulators may be necessary to promote transparency in governance and
trying to “curry favor” with the general population by tackling allow ordinary citizens to supervise power. Sunshine is
high consumer prices in China. Critics claim that Chinese reg- the best cure for corruption and an indispensable guar-
ulators have used “questionable tactics”, the Wall Street Journal antee of the rule of law.”
says, such as advising companies under investigation not to seek fawan.com, Oct 15
legal representation, “to control product pricing in industries
ranging from dairy to auto parts.” Mr. Xu countered by declar- “Much needs to be done to establish the rule of law in a
ing that those companies have been allowed to bring their own society that had long been under the rule of man. Offi-
legal counsel to meetings. Ren Airong, a director of antimonop- cials can abuse their power, while citizens dare not chal-
oly at the State Administration for Industry and Commerce, lenge their illegal behavior. Rooting the spirit of the rule
added that during the Microsoft investigation, regulators were of law in people’s hearts will be a longer process than
frequently outnumbered by the software company’s lawyers.17 drafting laws on paper.”
Wang Yukai, professor at the Chinese Academy of Gover-
According to the Wall Street Journal, Chinese companies nance, yicai.com, Oct 15
haven’t been spared the intensified scrutiny. Last September,
regulators fined three Chinese cement companies a combined “Various levels of people’s congresses sometimes
US$18.6 million for price fixing.17 ‘entrust’ their legislative power to government agencies.
This has resulted in a number of unjust laws that protect
Emphasizing The Rule of Law the agencies’ interests at the cost of people’s rights. To
Continuing the reform platform boldly introduced during
28
comm and Microsoft said that their firms are abiding by laws in the Third Plenum in 2013 and recognizing that in order to
China and are cooperating with authorities. 17 make these reforms work, it is vital for China to have strong
regulatory institutions, the Fourth Plenum of the CCP’s 18th
In September 2014, at a meeting with foreign executives at Party Congress in October 2014, passed the Decisions on Major
the China International Fair for Investment and Trade (CIFIT) Issues about Promoting the Rule of Law in a Comprehensive
in Xiamen, an annual event organized by China’s Ministry of Way, laying down the framework for a series of regulations
Commerce, Vice Premier Wang Yang declared that China is about the development of a market economy, including power
not targeting foreign multinationals in the enforcement of its list, setting restrictions on rent-seeking, protecting property
anti-monopoly law. Mr. Wang said that of 335 pricing investi- rights, opposing monopolization and stimulating innovation.
gations conducted by the National Development and Reform Chinese media reported that all these regulations aim to draw
Commission (NDRC) as of September 2014, only 33 affected a line between the government and the market, and focus on
foreign companies. Moreover, fines imposed on state-owned building a legalized, regulatory economy. These regulations will,
enterprises were not less than those levied on foreign compa- the report said, “no doubt play an active role in keeping a fair
nies, Mr. Wang said. He added that, if anything, China will be competitive environment, improving economic effectiveness.
tougher on Chinese companies than on their foreign competi- The dividends brought about by these regulations will help
tors. He explained that the intensified enforcement of the an- greatly China’s economic transformation and upgrading.” 9
ti-monopoly law “reflected China’s transition to ongoing super-
vision of companies and markets, rather than simply approving In an October 2014 editorial released after the Fourth
companies’ plans and then failing to monitor their activities.” 14 Plenum (whose main topic of discussion was implementing a
stronger rule of law), People’s Daily, the de facto broadcaster of
Also in September 2014, Chinese regulators echoed Vice political agendas from the perspective of the Communist Party
Premier Wang’s comments and denied allegations made by for- of China, defined the “rule of law” as “governance according to
eign business groups that China is using its anti-monopoly law the Constitution. To respect the Constitution and implement
to unfairly target foreign companies. In a rare joint press brief- it in letter and spirit is to lay the foundation of the socialist rule
ing, according to the Wall Street Journal, Xu Kunlin, an official of law with Chinese characteristics.”4
at the National Development Reform Commission accompa-
nied by senior officials of the Ministry of Commerce and the That same month, various online Chinese netizens and
State Administration for Industry and Commerce, three of the academics took to the interwebs to express their opinion about
main entities that have been spearheading anti-monopoly and the rule of law in China, as aggregated by China Daily:13
pricing investigations of the commercial sector in China, said
that China treats foreign and domestic companies fairly and re- (The following are quoted verbatim from China Daily, October
iterated that China does not specifically foreign companies for 21, 2014)
anomalies probes. 17
“To prevent the authorities from abusing the law, it is
The same report speculates that Chinese regulators may be necessary to promote transparency in governance and
trying to “curry favor” with the general population by tackling allow ordinary citizens to supervise power. Sunshine is
high consumer prices in China. Critics claim that Chinese reg- the best cure for corruption and an indispensable guar-
ulators have used “questionable tactics”, the Wall Street Journal antee of the rule of law.”
says, such as advising companies under investigation not to seek fawan.com, Oct 15
legal representation, “to control product pricing in industries
ranging from dairy to auto parts.” Mr. Xu countered by declar- “Much needs to be done to establish the rule of law in a
ing that those companies have been allowed to bring their own society that had long been under the rule of man. Offi-
legal counsel to meetings. Ren Airong, a director of antimonop- cials can abuse their power, while citizens dare not chal-
oly at the State Administration for Industry and Commerce, lenge their illegal behavior. Rooting the spirit of the rule
added that during the Microsoft investigation, regulators were of law in people’s hearts will be a longer process than
frequently outnumbered by the software company’s lawyers.17 drafting laws on paper.”
Wang Yukai, professor at the Chinese Academy of Gover-
According to the Wall Street Journal, Chinese companies nance, yicai.com, Oct 15
haven’t been spared the intensified scrutiny. Last September,
regulators fined three Chinese cement companies a combined “Various levels of people’s congresses sometimes
US$18.6 million for price fixing.17 ‘entrust’ their legislative power to government agencies.
This has resulted in a number of unjust laws that protect
Emphasizing The Rule of Law the agencies’ interests at the cost of people’s rights. To
Continuing the reform platform boldly introduced during
28
